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Thursday, May 7, 2015

The paranoia surrounding 1MDB

By SSK

Malaysians are getting too paranoid on the subject of 1MDB.

Tabung Haji has for years been investing in various instruments, property included, to ensure that the depositors’ money grows. Idle money depreciates so money must be made to work for it to appreciate.

For more than 50 years this has never been an issue. But now that Tabung Haji is said to have purchased an asset from 1MDB, all hell is breaking loose.

Is the Tabung Haji purchase of this asset a bad purchase or is the objection mainly because it is said to be purchasing the asset from 1MDB? And, therefore, if the purchase were not from 1MDB then it would be okay.

No one is scrutinising whether the purchase is good or bad for Tabung Haji. The issue is that the purchase is from 1MDB and any purchase from 1MDB must be opposed.

This is beginning to sound like an opposition spin: anything the government does is wrong and we must oppose it for the sake of opposing even when it is good.

The fact that 1MDB may have purchased the asset at a lower price and sold it at a higher price is not a crime. Is that not the objective of doing business: to purchase low and sell high? If it were the other way around then it would certainly be bad business.

Tabung Haji obtained the advice of a professional independent valuer to establish the market price of the asset before purchasing it. And Tabung Haji did not pay a price above market value.

The allegation against 1MDB is that it made bad business decisions. But even when it makes good business decisions there are still objections. Now the objection is not that 1MDB is losing money but that 1MDB is making money.

1MBD was also accused of losing RM42 billion; that RM42 billion simply ‘disappeared’. If RM42 billion disappeared then how do you account for that land which Tabung Haji bought? This would mean the money did not disappear but is in that land.

And then when 1MBD makes a profit on that land, as how it should, this, too, is raised as an issue. It looks more and more like the objective of the critics is merely to see 1MDB fail so that this can be used to force the Prime Minister’s resignation.